Key Highlights
—Pakistan’s thermal coal imports for Aug’20 was recorded at 1.24 mn t against 1.24 mn t in Jul’20 and on y-o-y basis, rising by 10%.
—-Sector-wise, thermal coal imports from Pakistan’s cement sector rose by 14% m-o-m at 0.41 mn t. Whereas, imports by power sector fell by 9.2% at 0.58 mn t.
—Indonesia recorded the highest country-wise increase of 26% m-o-m at 0.26 mn. Whereas, from South Africa imports increased by 5.6% at 0.97 mn t.
Cement sector recovers in Pakistan
— Pakistan’s cement industry recorded a growth of 5% in total dispatches from 3.351Mt to 3.52Mt in August 2019.
—According to market sources, although the impact of construction package announced by the government in May’20 has not been felt fully, the cement manufacturers are focusing on clinker exports to various markets including Bangladesh, Sri Lanka, East Africa, China etc.
—In Aug’20, country’s cement exports registered an increase of 5.8%, rising to 0.73 mn t from 0.69 mn t in the same month last year.
Demand from textile sector also surges
—Pakistan’s thermal coal imports by the textile sector have recorded an increase of more than 300% at 0.11 mn t in August.
—Market reports suggest that at present Pakistan’s domestic textile mills have resumed at full production capacity. In comparison with the same period last year, the textile and garment exports have rises by around 14% leading to an increase in coal requirement by the manufacturing units.
—Coal buyers in Pakistan are taking advantage of the lower Indonesian coal prices and the stocking up of coal is resulting in increased imports.
Future outlook
Demand for thermal coal in Pakistan is expected to improve in the upcoming months. This is because buyers in Pakistan use lower-CV Indonesian thermal coal for blending purposes, and have more recently been switching to Australian thermal coal over South African due to a favorable pricing.
While after a month’s absence it is expected that Australian coal will again make its entry into the Pakistan markets in Sep and October. However, South African coal will still be the preferred option in the long–run given high moisture content in Australian coal (12%) against South African (8%).
Apart from this, Pakistan’s coal fired generation is set to increase further as there are several power plants under construction, and are expected to come online. Currently, Pakistan has 5,015 MW of operational coal-fired capacity with an additional 9,220.5 MW either planned or already under construction.
Leave a Reply